Disney turns left into Florida quagmire
Disney’s political activism has backfired in Florida and stirred a debate about tax benefits
When it comes to politics, the Walt Disney Co. has a history of spreading donations like pixie dust. Though its overall political spending has favored Democrats—$7.3 million went to Democratic recipients in 2020 compared with $1.5 million for Republicans—it has always worked to keep at least a few friends on the political right.
In 2020, for example, the organization donated more than $55,000 to the Republican political party committees in the House and Senate and roughly $30,000 to Democratic counterparts. Disney gave nearly $5 million to Florida candidates in 2020 and around $1 million to the state Republican Party. According to OpenSecrets, in the last two years, Disney’s corporate PAC has given $50,000 directly to Republican Gov. Ron DeSantis and nearly $300,000 to supporters of the Parental Rights in Education bill, a measure now signed into law and driving a nationwide debate over LGBT instruction in public schools.
But with its recent public stance against that bill and its embrace of pro-LGBT politics, Disney seems to be giving up any attempt to maintain friendly relations with conservatives. John Stemberger, president of the Florida Family Policy Council and a longtime resident of Orange County, Fla., laments the change: “Disney was one of those neutral zones. We could leave politics at the door and enjoy an amazing entertainment experience like no other. But it’s now become politicized and energized by the left.” Thanks to that politicization, Disney is also now grappling with the reality of potential lost tax benefits in the state.
On March 11, Disney CEO Bob Chapek promised—after loud criticism from some employees and pro-LGBT groups such as Human Rights Campaign—to fight Florida’s bill, which protects kindergartners through third graders from public school teaching about sexual orientation and gender identity. Opponents labeled the legislation as anti-LGBT and called it the “Don’t Say Gay” bill.
DeSantis said the organization’s political aggression went too far, especially since the bill had nothing to do with Disney. On April 22, he signed a separate bill that will revoke the company’s special tax district for Reedy Creek, the 25,000-acre site of Disney’s four theme parks, two water parks, hotels, restaurants, and shops. The special tax status, the result of a deal struck in 1967, allows the company to tax itself, run infrastructure, and pay utilities without state involvement. The law dissolving the Reedy Creek Improvement District would take effect in June 2023.
Supporters, opponents, and Disney itself have the same question: now what? Reedy Creek’s district is unusual in its function and size, even employing its own firefighters, who now wonder whether they will continue to have jobs. Officials in the two counties in which the district resides worry they’re about to be saddled with Disney’s $1 billion in debt.
At a news conference on April 21, just before the vote, Orange County Mayor Jerry L. Demings said his budget will be overburdened if it has to adopt Disney’s public safety and utility services with no new revenue: “The devil is in the details, and we, quite simply, today do not have the details.”
DeSantis said additional legislation will clarify how the dissolution will work and how the state will treat special districts in the future. At a Monday event, he said, “Under no circumstances will Disney be able to not pay its debts, we will make sure of that.”
Last Thursday, Reedy Creek issued a statement to its bondholders pointing out that the original 1967 agreement has a pledge from Florida that it will not impair the rights of bondholders until “all costs and expenses in connection with any act … are fully met and discharged.” That might mean that Florida cannot dissolve the district until its debts are paid and new county funding is enacted. Reedy Creek said it will conduct business as usual for now.
Legal experts debate whether Disney also has a First Amendment claim against the law. In 2010, the Supreme Court ruled in Citizens United v. Federal Election Commission that corporations have the same rights to freedom of speech and expression that civilians do, even when that comes in the form of hefty campaign checks.
“Disney obviously has no right to have a business improvement district, but to take away something like that based on speech, that strikes me as highly likely to be unconstitutional,” Hofstra University law professor and corporate speech expert Daniel Greenwood told the Tampa Bay Times.
Others argue the First Amendment does not apply in the same way because Disney does not limit itself to the bounds of a corporation. It also functions as a governmental entity through Reedy Creek.
“The Legislature had in effect given [Disney] a particular form of political power, which it now seeks to withdraw,” UCLA law professor Eugene Volokh wrote in a blog post. “Now that Disney has increased its political role in Florida politics, it may be that the Florida Legislature may conclude that it doesn’t want to give Disney special benefits that other entities don’t get.”
At a Wednesday shareholder meeting, Reedy Creek’s board said it has no answers on what to do next. Member Donald Greer said simply, “We don’t know where we are going.”
Walt Disney World and its 75,000 employees likely will not leave Florida (though Colorado’s governor has offered use of his state’s mountains). If it negotiates a new district agreement, Stemberger said Disney will have to “eat major crow.” If Reedy Creek raises a volley of lawsuits, litigation could last beyond the June 2023 deadline.
Stemberger, president of the Florida Family Policy Council, has been watching Disney’s political dynamic for years and said it was inevitable that shifting cultural values would be at loggerheads with the Legislature. But he disagreed that free speech is at stake.
“Nobody’s trying to shut down Disney or silence them,” he told WORLD. “It’s a fair, even-handed way of putting them on the same playing field. No special status if they’re going to become an enemy of the state.”
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